G20 says it is prepared for Brexit, but concerned by steel dumping

Ministers and their delegation members attend the opening session of the G20 Trade Ministers Meeting in Shanghai, the opening session of the G20 Trade Ministers Meeting in Shanghai, China, 09 July 2016.

Photograph: EPA/RAJ WONG CHINA OUT

The fallout from Brexit will not be unsurmountable, the finance ministers and central bank chiefs of the Group of 20 leading economies (G20) said on Sunday.

"Members of the G20 are well positioned to proactively address the potential economic and financial consequences stemming from the UK referendum," which voted on June 23 to leave the European Union, according to a statement issued after two days of talks in Chengdu, 1,800 kilometres south-west of Beijing.

The referendum for Brexit has added to the "uncertainty in the global economy," the statement from G20 finance ministers and central bank governors said, adding "we hope to see the UK as a close partner of the EU."

The statement also raised concerns about structural problems including excess capacity in steel and other industries, which are "exacerbated by a weak global economic recovery and depressed market demand, [causing] a negative impact on trade and workers."

China's excess production in sectors including steel has been a source of tension globally, with US Treasury Secretary Jack Lew saying last month that it had a "distorting and damaging effect" on international markets.

The German industry is seeking additional measures against dumping - subsidised exports sold at loss-making prices - and for China to reduce its capacity, which has put pressure on European markets.

Chinese finance minister Lou Jiwei told the meeting there are no systemic risks in China, despite the high debt level of some, mainly state-owned, companies, and some defaults in the bond market.

The G20 statement also took aim at economic inequality. "Meanwhile, the benefits of growth need to be shared more broadly within and among countries to promote inclusiveness," it said.

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